GBP/USD Daily Price Forecast – Cable Drifting Lower Ahead of Unemployment Data

The Cable remains under the hangover of the last day’s plunge amid escalated trade tensions. China had retaliated to the US tariffs by imposing duties on around $60 billion US imports. This action sent high intensified waves into the market leaving the overall sentiment down. Also, the GBP/USD pair suffered a massive drop of around 0.75% or 97 pips.

The US Dollar Index that computes the Greenback against the significant rivals faced the initial after-effect of the Chinese retaliation. However, investor sentiment appeared to morph towards less risky assets like Gold and other safe-haven assets. This pivotal shift of the investor community led to increased selling bias on the Antipodeans, Cable, and other peers. On Tuesday morning, the Cable was hovering in the lower vicinity near 1.2960 levels.

Over to the Brexit front, there came out small progress from the Cross-party talks last day. However, the GBP/USD pair continued to remain dejected amid trade tensions. Recent reports suggested that May and Corbyn will gather today for the resumption of talks.

In the meanwhile, the Conservatives remain against the Labor appeal of getting the UK Customs Union. Senior Tories commented that if the PM finalizes a deal with the Labor, then she would divide the party. On the other hand, the Opposition Labor party MPs claim that there is no significant progress yet out of the Cross-party talks.

GBP/USD Influencing Events

On Tuesday several GBP significant events are lined up at 08:30 GMT. The ILO March Unemployment Rate is the most crucial data to get published today. The street analysts remained in-line with the previous numbers to 3.9 percent. Next significant data is, the March Average Earnings Excluding Bonus and the market expect to come 0.1 percent lesser. Later, the Average monthly Earnings Including Bonus will come out and was anticipated to appear bearish. The National Statistics will broadcast the April Claimant Change, and the consensus expects a low reading this time.

Over the USD specific events front, The FOMC’s William will deliver a speech at 0715 GMT. Furthermore, the US April’s Import & Export Price Indexes would get released. The indexes are expected to impact less over the pair. The NFIB Research Foundation will issue the Business Optimism Index for April during 10:00 GMT. This time, the analysts hope for a higher number than the prior one.

Technical Analysis

1-Day Chart

Bearish sentiment sets as the 50-days EMA crossed the 200-days EMA and went below it. All the significant EMAs remained on the north side of the pair. This position showcases strong downtrend signs in the medium term. The pair may experience some resistance while heading near 1.3000 levels as per the Fibonacci Speed Resistance Arcs.

1-Hour Chart

The Cable moved below the Ichimuko Clouds (IC), alluding a bearish signal. Further, the cloud acted as the resistance point near 1.3008 levels. And the pair received a support point around 1.2951 levels. Meantime, the base line and the conversion line of IC were moving almost in a similar manner. Both lines were hardly 17 pips away from each other. The Relative Strength Index (RSI) went below 40 levels and hovered near 34 levels. This downtrend in the RSI indicated a heavy selling at 08:00 GMT.